Finland-based Paptic lands €23M to expand wood fiber-based packaging production
06 Sep 2023 --- Finnish scale-up company Paptic, which specializes in manufacturing wood fiber-based packaging materials, announced it raised €23 million (US$24.7 million) in growth financing for its carbon footprint-reducing packaging.
The global flexible packaging market is estimated to be worth over €200 billion (US$214.6 billion) annually, and 70% of the materials currently are plastics, Paptic reports.
“With this funding, we will improve our market presence, sales network and customer services. It will enable us to develop our materials and production technology further, strengthen our [environmental] sustainability performance and expertise, ensure that we can exceed the requirements of our customers and tighten regulation,” Tuomas Mustonen, the founder and CEO at Paptic, tells Packaging Insights.
“This growth investment will accelerate and support our goal to reach €100 million (US$107.3 million) of revenue in 2026 and attain the carbon neutrality target by 2030.”
A drop-in solution
Paptic materials are recyclable at scale with cardboard and packaging papers. The company’s CEO says carbon footprints decrease by half when replacing plastic with Paptic while keeping the packaging weight the same.
Paptic wood fiber-based packaging can be used across multiple sectors for various applications. “Paptic materials are made of renewable wood fibers and offer the functionality of plastics. Paptic materials offer a unique combination of sustainability, strength and positively distinguishable haptic properties.”
“The materials were developed to reduce the use of plastic films in flexible packaging. Paptic is a drop-in to most packaging lines, and it is made of wood fibers sourced from sustainably managed forests.”
With the promise of more environmentally sustainable wood fiber packaging, Paptic’s shareholder base was expanded with new strategic partners and international equity investors.
The German venture capital fund European Circular Bioeconomy Fund and a global water and hygiene solutions company Ecolab contributed to the growth financing. Ecolab focuses on [environmentally] sustainable solutions and has a strong foothold in North America to support Paptic’s future expansion in that market.
“We are excited about the opportunity to support circularity through our investment in Paptic and its successful approach to [environmentally] sustainable packaging. Our shared vision of protecting our planet and its vital resources is a foundation for this partnership,” says Luis Pereira, senior vice president and general manager of Ecolab’s Nalco Water Paper Division.
Growth demands packaging increase
Some of the company’s earlier shareholders, such as Japanese trade house Itochu Fibre, participated in the financing round. Paptic was granted €2.5 million (US$2.7 million) by the European Innovation Council’s Accelerator program and received a non-dilutive capital loan of €10 million (US$10.7 million) from the Finnish Climate Fund.
The Finnish Climate Fund loan is specifically targeted at facilitating the development of the industrial scale-up of Paptic’s foam-based manufacturing technology.
Paptic focuses on reducing its carbon footprint compared to plastic packaging.
Paptic has more than doubled its revenue annually for four consecutive years. In the upcoming years, Paptic says it will concentrate on strengthening its presence in Europe, accelerating growth in Asia and exploring opportunities for market expansion into new areas like North America.
Paptic says its growth strategy is supported by forecasts stating that the amount of packaging is still increasing due to economic and population growth. Without new innovative fiber-based solutions, much of the growth would come from plastic.
The company continues that replacement materials for plastics should be compatible with existing recycling streams. For example, Paptic materials are recyclable with cardboard and packaging papers.
“In many cases, Paptic materials offer high-quality features at 50% lower grammages than traditional packaging papers. After use, the cellulosic fibers of Paptic can be recycled, allowing each fiber to be used over multiple life cycles of fiber-based materials,” explains Mustonen.
“Paptic materials are produced on existing paper production lines and converted on existing packaging lines. No major investments are needed to produce or take the Paptic materials into packaging uses.”
By Sabine Waldeck
